Arbitration Guide IBA Arbitration Committee - INDIA - (Updated December 2019)

1. Background

(i) How prevalent is the use of arbitration in your jurisdiction? What are seen as the principal advantages and disadvantages of arbitration?

Arbitrations are very common in commercial contracts in India (especially in cross border agreements). Indeed, arbitration clauses are not only advisable, they are considered necessary. This is because the ordinary civil courts (which would otherwise entertain a suit for damages or breach of contract) are so badly clogged with backlog and judicial delays that in low stake matters it can become pointless to pursue these remedies. Added to this are ad valorem court fees payable up front in civil suits.

The principal disadvantages of an arbitration in India are: the lack of a pool of specialized arbitrators; the absence of strong domestic arbitration institutions; and local arbitrators (mostly retired Judges) not being in sync with the best practices of international commercial arbitration. At the same time,